OMRI DAILY DIGEST
No. 81, 24 April 1996
HUNGARIAN RADIO PREPARES FOR BELT-TIGHTENING. Hungarian Radio, currently
facing severe financial difficulties, has drawn up a plan introducing
austerity measures at the station, Hungarian dailies reported on 24
April. Broadcasting is to be reduced on one of the three channels, and
several programs will be cut on the other two. Honorariums will also be
cut by 55%. Management says Hungarian Radio's financial predicament
results from the state budget's failure to guarantee subscription
revenues since 1995. It added that advertising has not brought in the
expected revenues because of competition from commercial stations. The
cabinet is expected later this week to discuss a proposal granting an
additional 4.5 billion forints subsidy to Hungarian Radio and TV. --
Zsofia Szilagyi
FBI ACADEMY OPENS IN HUNGARY. One year after it began operations, an FBI
Academy has officially opened in Budapest, Hungarian media reported on
23 April. The inauguration of the first police academy of its kind
outside the U.S. was postponed due to the Oklahoma bombing last April,
which prevented FBI Director Louis Freeh and U.S. Attorney-General Janet
Reno from attending. The academy's curriculum includes training to
combat international terrorism, drug smuggling, counterfeiting, and
money laundering. -- Zsofia Szilagyi
[As of 12:00 CET]
Compiled by Jan Cleave

Tuesday, 23 April 1996 Volume 1, Issue 334
BUSINESS NEWS
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> ----------------------------------------------------
US TAX COMMISSIONER COMMENTS ON HUNGARY'S TAX SYSTEM
> ----------------------------------------------------
The Commissioner of the US Internal Revenue Service, Margaret
Richardson, says the United States would like to support
former East bloc countries in developing stable tax regimes.
CET's Stefan Bos reports that Richardson met with government
officials from Hungary, a country with one of the highest
taxrates in Europe. US Commissioner Richardson tells CET she
wants to support Hungarian tax authorities in their fight
against tax evasion. But she is unsure whether lowering the
current taxrate, that of 48 percent for the highest salaries,
will solve the problem.
"Whatever the taxrate is, people will always think that it is
too high. My predecessor once said that when the US dropped
the taxrate from 89 percent to 50 percent, people thought it
was still too high."
But Jean Rogers, Director of the Centre for
International Private Enterprise in `Budapest, disagrees.
"Richardson said the highest rate is always perceived as
being too high, but there is a relationship between high
taxrates and non-compliance."
Richardson, however, believes the best way to battle the black
market economy is to change attitudes in former Communist
countries, where direct income taxes were only introduced a
few years ago.
"I think that one
of the things we need to do is to make sure that people do
understand what their tax obligations are and that they feel
that the system is fair. We have our underground economy in
the United States as well, but I think that most people feel
that the system does work, and work well, and they pay their
taxes voluntarily," said the commissioner.
But for now this seems easier said than done. American
officials say Hungary is not only the country with the highest
taxrate, but also the sate where tax evasion has become almost
a national sport.
---------------------------------------
HUNGARIAN PARLIAMENT VOTES TO JOIN OECD
---------------------------------------
The Hungarian parliament voted on Tuesday to join the
Organisation for Economic Cooperation and Development
(OECD), becoming its 27th member. The 386-member
parliament voted 278-0 in favour of accepting an
invitation from the Paris-based OECD to join. No negative
votes or abstentions were recorded, but other members were
not present for the vote. Hungary regards the move as a
gateway to the European Union and the North Atlantic
Treaty Organisation. Hungary is the second ex-communist
country to join the OECD, after the Czech Republic.
Poland, Slovenia, Croatia and Slovakia hope to join over
the next few years. To meet the OECD's entrance
requirements, Hungary reduced its soaring budget and
current account deficits, made its forint convertible in
January and reached an agreement with the International
Monetary Fund on a standby loan last month. It also
agreed to allow foreign companies, including banks, to
open branches in Hungary by 1998 at the latest. Currently
only foreign companies that have joint ventures or shares
in firms based in Hungary can open branches here.
> ---------------------------------------------
BOAT CAPSIZES ON DANUBE, EIGHT FEARED DROWNED
> ---------------------------------------------
Eight people were feared drowned in the Danube river after
their boat capsized while crossing from Hungary into
Slovakia on Monday night, Slovak police said. A boat
carrying 16 people overturned at around 11 pm Monday night
near the Slovak border town of Sturovo, Slovak police
spokesman Dusan Ivan told Reuters. Half of passengers
succeeded in reaching the riverbank on the Hungarian side.
"The police are still searching for the rest," Ivan said.
Police are calling the group illegal immigrants, but Ivan
declined to disclose their nationality. The cause of the
accident was not yet known and as yet there are no signs
of the missing passengers.
> -------------------------------------------------
HUNGARY BUX INDEX HITS HIGH, PACE OF GROWTH SLOWS
> -------------------------------------------------
Hungarian shares continued to rise on the Budapest Stock
Exchange on Tuesday, but the rate of growth slowed and
even some correction may come, traders said. "The market's
mood is still rather optimistic, but the pace of growth is
slowing. I expect some turn in the case of several
shares," Balazs Bathory of Creditanstalt Securities said.
He added that any downturn will be because of a natural
correction and not because of any fundamentals. The BUX
index hit its third high in a row, closing at 2,635.01
points, up 16.01. Spot share turnover rose to 960.6
million forints from 805.6 million on Monday, with almost
half of it generated by the surging Borsodchem.
Borsodchem soared once again in heavy demand. After
peaking at 2,840 forints it ended at 2,825 forints, up
180. Inter-Europa Bank, which has risen sharply over the
past few days, might soon reach a resistance level. After
peaking at 28,150 forints, it ended at 27,900, up 100. The
rise of retailer Fotex has also faltered. Fotex closed at
174 forints, up one. Companies in the listed category of
the bourse but not in the traded one will have to release
their first quarter results by May 15. They are expected
to be generally good, possibly boosting the market
further, traders said. BUX index futures ended higher by
7.50 to 22.50 points, with all maturities in a strong
turnover of 81.8 million forints.
> --------------------------------------------------
HUNGARY TO DISCUSS ENERGY IMPORT TERMS WITH RUSSIA
> --------------------------------------------------
Hungary will initiate negotiations on the terms of its
energy import agreements with Russia, Privatisation
Minister Tamas Suchman said on Monday. The negociations
will concern "secure supply, anti-inflationary politics,
the review of the system of making prices... [and the]
demand that we and the country in point should clarify our
points of view," he told Hungarian Television following a
board meeting of the national oil and gas company MOL.
Hungary buys a substantial part of its oil and gas supply
from Russia. The planned negotiations are aimed at
pushing down energy costs as a part of Hungary's efforts
to reduce inflation to 20 percent this year from 28.3
percent in 1995.
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